In the US Vehicle Miles Traveled
has been below its previous peak for 44 months, a startling break
from the familiar pattern of the past sixty or seventy years.
Notice the previous sharp break after the Iranian Revolution.
And look what happened then of course, the epic ramp upward --
when the price of oil fell to about an order of magnitude lower
than it's been recently. There was cheap abundant oil to finance
that post-shock ramp. The massive off-shore deposits that were
discovered in the 1960s and tapped in the 1970s and 1980s have
now been substantially consumed and depleted, and have not been
replaced by similar free-flowing deposits. Instead, the oil that
used to flow from Prudhoe Bay, the North Sea and Cantarell has
been replaced with even more difficult, deeper, more expensive
sources, and with tar sands that have a marginal cost of production
around $80 per-barrel. The Saudis who flooded the oil market
compliantly according to American wishes in the 1980s now seem
unwilling or unable to do so. Plus (or should I say minus) producers
like the Saudis are using more and more of their own oil, leaving
fewer barrels available for export to net importers like the
US.

So, don't bet on another epic
ramp upward. America with its relatvely stable population has
likely reached Peak Demand for oil and therefore energy, and
probably Peak Driving. In other words, the economy as we knew
it, which was so intelligently based on infinite supplies of
nearly free crude from the Middle East, is done.